Mentions of “meta-universe” were relatively few and rare in Meta’s quarterly earnings report this week-we counted just seven mentions compared to 23 for “AI”-but the company’s investment in its vision of a virtual reality social future remains tremendous. .
Starting in 2021, Meta began separating its Reality Labs VR and AR division into a separate segment for financial reporting purposes. This allows you to see how much Meta is pouring into these areas, and the numbers are staggering.
Meta reported a Reality Labs operating loss of $13.7 billion in 2022, up from the already staggering $10.2 billion that the division invested in the division in 2021. Reality Labs generated $2.16 billion in revenue last year, down from $2.27 billion in 2021.
For scale, recall that Meta bought Oculus — the pioneering virtual reality hardware company that laid the groundwork for its efforts — back in 2014 for $2 billion. The company’s investment in the field has only increased, and it has acquired a number of major software companies. including Beat Saber creator and now Within , developer of the virtual training app Supernatural.
Meta did not disclose Reality Labs’ headcount, but the division reportedly employed 17,000 people before it was laid off late last year . The lion’s share of the money spent in this area is on personnel and equipment development.
Meta CFO Susan Lee said the company expects its annual losses for Reality Labs to be even higher in 2023. “…We’re going to continue to invest heavily in this area given the significant long-term opportunities we see,” Lee said. , calling his AR, VR and meta-universe software efforts a “long-term investment.”
Meta plans to release a next-generation consumer headset later in 2023, such as an updated version of its Quest hardware with mixed reality support. Apple, one of the few consumer-oriented companies willing to compete with Meta in this sector, is expected to release a new AR/VR headset soon .
In this week’s earnings report, Meta CEO Mark Zuckerberg highlighted the fact that Reality Labs includes AR, VR and meta-universe software (Horizon Worlds, etc.) at the company. “I think the software and the social platform may be the most important part of what we do, but building the software is much less capital intensive than the hardware,” Zuckerberg said.
Meta may publicly downplay its efforts to build a meta-universe to please skeptical investors, but the company seems willing to stay the course on VR and AR.
“… None of the signals I’ve seen so far suggest that we should change Reality Labs’ strategy in the long run,” Zuckerberg said. “We’re constantly adjusting the specifics of how we do that, so I think we’ll certainly look at that as part of our ongoing work to improve efficiency.”
